More public rental flat applicants used to be home owners
NEARLY six in 10 public rental flat applicants today are former home owners who sold their flats.
This is up from 52 per cent five years ago, Minister of State for National Development Maliki Osman told Parliament yesterday.
This worrying trend comes even as the Government increases access to public rental flats for those who need it, he said.
Among this group are families that have cashed out on their homes for short-term gains only to suffer later, he added.
Dr Maliki cited a woman who sold her flat in 2010 and got cash proceeds of nearly $200,000. After several bad decisions, she lost it all and stayed at void decks and the beach before getting a public rental flat in 2013.
"We have seen many cases like Madam A (the woman)," he said.
The Government wants to help families move from renting flats to owning their own homes, but it needs to be done in a considered manner, said Dr Maliki.
He pointed out that some of these tenants face a steeper climb towards home ownership as they no longer qualify for certain subsidies and grants, which were already used when they bought their previous flats.
He said that as tenants are likely to be older, they also face problems getting sufficient housing loans.
Some of these families may have been caught in the rental trap because they sold their flats and used the proceeds "unwisely or even irresponsibly".
"Will our society support giving them more housing grants than what other families, including lower-income families, receive?"
He added: "Would such a well- intended policy change result in moral hazard?... We will work out a more inclusive and compassionate approach, with greater incentive for self-reliance, and stronger community support."
In response to MPs' questions during the debate on his ministry's budget, Dr Maliki also outlined plans aimed at helping low-income families find a home.
Mr Zainal Sapari (Pasir Ris- Punggol GRC) and Mr Zainudin Nordin (Bishan-Toa Payoh GRC) wanted to know how the Government could further help low- income families get homes, while Mr Pritam Singh (Aljunied GRC) wanted public rental rules to be eased for unwed mothers.
Dr Maliki said the Housing Board's supply of rental flats will be further ramped up to 60,000 by 2017, from 51,000 today.
The average waiting time for rental flats has also dipped to 5.5 months today, down from 21 months back in 2008.
Rents have also stayed low. The lowest rental rate of $26 a month for one-room flats has remained unchanged for the past 35 years. Two-room rental flats start at $44 a month.
"That is why, even as we ramp up supply, we must continue to be judicious in allocating these highly subsidised rental flats, so that we target help where it is most needed, and stretch each dollar to help as many as possible," Dr Maliki said.
Some tenants, eager to go from renting to owning their homes, are looking forward to changes that can facilitate this jump.
One of them is housewife Mandee Hameed, 42, who lives in a one-room rental flat in Jalan Kukoh with her husband and her two daughters, aged 22 and two.
After renting for four years, her family successfully applied for a three-room Build-to-Order flat in Yishun last year.
"The main reason for moving is my baby," said Ms Mandee.
"I don't think it's a good environment for her to grow up in."
The Straits Times / Top of The News Published on 12 March, 2015
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